Section 50CA

Taxation of Buy Back of Shares

Income Tax - Company ♦ Section 115QA, which provides for the levy of tax, on account of buy-back of shares, at an effective rate of 23.296% (20% + 12% SC + 4% H&EC) ♦ Buy-Back Tax has to be paid by the company on the distributed income which is nothing but the consideration paid by the company on […]...

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Section 50CA Special provision for full value of consideration for transfer of share other than quoted share

Income Tax - Section 50CA Special provision for full value of consideration for transfer of share other than quoted share Section 50CA of Income tax Act, 1961 Read Rule 11UAA Analysis of above mentioned Section with Rule are as under:- Section 50CA i.e.  Special provision for full value of consideration for transfer of share other than quoted share [...

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Selective capital reduction – Applicability of section 50CA & section 56(2)(x) of Income-tax Act, 1961

Income Tax - Capital reduction refers to corporate reorganisation activity in which the existing share capital is extinguished. Companies consider utilising this route for various business reasons, such as returning excess capital to shareholders, distributing assets to shareholders, loss of original share capital due to accumulated business losses, e...

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Section 50CA: Implications of double taxation

Income Tax - Section 50CA provides for adoption of the value to be determined as per the Rules, (for convenience sake referred to by me as FMV ) as the consideration for transfer of shares of a company which are not being quoted, where the actual consideration is lower than that. The difference shall be subjected to tax in the hands of the transferor....

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Capital gain on sale of shares- Taxation

Income Tax - Capital gains in case of transfer of shares ♦ If any capital asset has been transferred like land, building, gold etc. profit shall be called capital gains and if the asset has been transferred within a period of three years, capital gains shall be short term and shall be taxable at the normal rate and […]...

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6 Suggestions for Amendments in Income Tax Act by BCAS

Income Tax - Bombay Chartered Accountants' Society has made a Representation on 'Suggestions for Amendments in the Income Tax Act', on 24th May, 2019, to the Joint Secretary TPL, Central Board of Direct Taxes, Ministry of Finance, Government of India....

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Draft rules on valuation of ‘unquoted shares’ for Sec. 56(2)(x)/50CA

Income Tax - CBDT has released the draft rules prescribing ‘unquoted shares’ valuation for purposes of Sec. 56(2)(x)/50CA (an important development impacting corporate restructuring) inviting comments from public....

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Rule 11UAD- Prescribed class of persons for section 50CA

Notification No. 42/2020-Income Tax [G.S.R. 423(E)] - (30/06/2020) - New Income TAx Rule 11UD- Prescribed class of persons for the purpose of section 50CA i.e to whom  provisions of section 50CA  shall not apply to transfer of any movable property, being unquoted shares, of a company and its subsidiary and the subsidiary of such subsidiary by an assessee in certain...

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CBDT notifies rules to determine of Fair Market Value of unquoted shares

Notification No. 61/2017-Income Tax [G.S.R. 865(E)] - (12/07/2017) - Determination of Fair Market Value for share other than quoted share. 11UAA. For the purposes of section 50CA, the fair market value of the share of a company other than a quoted share, shall be determined in the manner provided in sub-clause (b) or sub-clause(c),as the case may be, ...

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Recent Posts in "Section 50CA"

Taxation of Buy Back of Shares

Company ♦ Section 115QA, which provides for the levy of tax, on account of buy-back of shares, at an effective rate of 23.296% (20% + 12% SC + 4% H&EC) ♦ Buy-Back Tax has to be paid by the company on the distributed income which is nothing but the consideration paid by the company on […]...

Read More
Posted Under: Income Tax |

Section 50CA Special provision for full value of consideration for transfer of share other than quoted share

Section 50CA Special provision for full value of consideration for transfer of share other than quoted share Section 50CA of Income tax Act, 1961 Read Rule 11UAA Analysis of above mentioned Section with Rule are as under:- Section 50CA i.e.  Special provision for full value of consideration for transfer of share other than quoted share [...

Read More
Posted Under: Income Tax |

Selective capital reduction – Applicability of section 50CA & section 56(2)(x) of Income-tax Act, 1961

Capital reduction refers to corporate reorganisation activity in which the existing share capital is extinguished. Companies consider utilising this route for various business reasons, such as returning excess capital to shareholders, distributing assets to shareholders, loss of original share capital due to accumulated business losses, e...

Read More
Posted Under: Income Tax |

Section 50CA: Implications of double taxation

Section 50CA provides for adoption of the value to be determined as per the Rules, (for convenience sake referred to by me as FMV ) as the consideration for transfer of shares of a company which are not being quoted, where the actual consideration is lower than that. The difference shall be subjected to tax in the hands of the transferor....

Read More
Posted Under: Income Tax |

Capital gain on sale of shares- Taxation

Capital gains in case of transfer of shares ♦ If any capital asset has been transferred like land, building, gold etc. profit shall be called capital gains and if the asset has been transferred within a period of three years, capital gains shall be short term and shall be taxable at the normal rate and […]...

Read More
Posted Under: Income Tax |

Valuation of Unquoted Equity Shares

Computation of Fair Market Value [FMV] of Unquoted Equity Shares as per Income-tax (20th Amendment), Rules, 2017 notified vide Notification No. 61/2017, dated 12.07.2017. Sale is applicable With Effec From 01.04.2018 and shall apply to assessment year 2018-19 & subsequent years....

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Posted Under: Income Tax |

Increase in safe harbour limit to 10%- section 43CA, 50C & 56

Increase in safe harbour limit of 5% under section 43CA, 50C and 56 of Income Tax Act, 1961 to 10% Section 43CA of the Income Tax Act, inter alia, provides that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than […]...

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Posted Under: Income Tax |

Corporate Gifts- An allowable transaction under Income tax?

Compilation of Section 47(iii), section 56(2)(x)(c), 50D & 50CA -Corporate gifts- an allowable transaction under Income tax? Purpose of section 56 defeated by the ITAT judgement? Brief overview of the judgement delivered On October 4, 2019, in a recent judgement of M/s Direct Media Distribution Ventures Private Limited v/s Principal...

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Posted Under: Income Tax |

Amendment to Section 56(2)(x) & Section 50CA of Income Tax Act

As per Section 56(2)(x) of the Income Tax Act, any person receives any property including shares of a company for a consideration less than the Fair Market Value, the Fair Market Value exceeding the consideration would be taxable in the hands of the person receiving such property. Clause 11 of proviso to Sec 56(2) (x) […]...

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Posted Under: Income Tax |

Rule 11UAD- Prescribed class of persons for section 50CA

Notification No. 42/2020-Income Tax [G.S.R. 423(E)] 30/06/2020

New Income TAx Rule 11UD- Prescribed class of persons for the purpose of section 50CA i.e to whom  provisions of section 50CA  shall not apply to transfer of any movable property, being unquoted shares, of a company and its subsidiary and the subsidiary of such subsidiary by an assessee in certain circumstances. Notification No. 42/2020...

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